President's Letters

Spring Bank's Growth and Success Profiled in the News

Timing worked out for bank’s openingThe Business Journal of Milwaukee - by Rich Kirchen

David Schuelke . . . “These are frankly good times to be a new bank, a well-capitalized bank, a bank that’s without portfolio problems.”

As the founders of Spring Bank prepared to open in late August 2008, they knew they were launching in a recession. Then, less than three weeks later, business everywhere stalled with the September 2008 near-meltdown on Wall Street and the credit market.

President and CEO David Schuelke and his team were unshaken in their belief they could attract business customers in a challenging time, and their theory has proven correct. The problems actually played into Spring Bank’s plans, Schuelke said.

Since early this year, Spring Bank has seen a spike in new deposits and loan customers. Assets have grown from $13.4 million a year ago to $63 million. Deposits jumped from $1.9 million to $51.8 million.

The bank posted its first profitable month in September, which was nine months sooner than expected, Schuelke said.

“The timing turned out to be better than we even thought,” Schuelke said. “These are frankly good times to be a new bank, a well-capitalized bank, a bank that’s without portfolio problems.”

Schuelke is a former executive with JP Morgan Chase. Executive vice president Dean Zwick is a former executive at Tri City National Bank, Oak Creek. Chief financial officer Greg Mieske was an executive at InvestorsBank in Waukesha.

Spring Bank has about 190 shareholders who invested $12.5 million in the bank. Schuelke said the bank holds enough capital to last through 12 to 18 months of loan growth.

Many larger banks have been tarred with the TARP “bailout” tag and many smaller banks are working through their own bad loan problems. That’s causing friction with many business customers who complain their banks continue to tighten credit policies and reduce credit lines.

The bank made $40.7 million in loans as of Sept. 30, and has about 100 business customers, Schuelke said.

Commercial real estate is the bank’s leading category of loans. Schuelke said Spring Bank is primarily financing owner-occupied real estate and investor-owned residential property. The bank has financed only one new residential development.

Spring Bank started with a clean slate and has been able to carefully make loans to small and midsize businesses that meet the bank’s conservative underwriting standards.

Business executives like John Knappenberger, who is the president and CEO of ANSI-ASQ-National Accreditation Board in Milwaukee, fits the profile. Knappenberger said his company, which accredits testing and calibration labs, was being “held hostage” by two larger banks due to their bureaucracy and lack of personal relationships. He shifted checking to Spring Bank and received a loan.

“I like local control. I like to reach out and touch the people in charge,” Knappenberger said.

The challenge for banks is to find safe loan candidates, said Jon Bruss of Fortress Partners, a Hartland bank investor.

“We know banks are pushing good and not-so-good customers out their door and the difficult thing is to sift through the good ones and make sure you’ve got the good ones,” Bruss said.